The old—and in the way—plan. (CPC Resources)

Exactly two years ago tomorrow, the City Council approved a sweeping $1.4 billion redevelopment plan for the Domino Sugar refinery on the Williamsburg waterfront. One of the biggest concerns at the time (of which there were many) was that the grand promise made by developer CPC Resources to make 30 percent of the project's 2,200 units would never be realized.

Nowhere in the zoning resolution was this mandated, even though it was the marquee feature of the 11-acre development, along with promises of waterfront access, top-notch open space and a school. The developer could build no affordable housing, though this would mean a smaller project, or use the city's inclusionary housing program to gain a bonus for bigger buildings in exchange for a promise to make 20 percent of any units affordable. Anything beyond that was a promise, one even CPC Resources did not have to keep. The firm had signed a memorandum of understanding saying it would follow through on this promise, but in no why was it legally binding.

That is why when it was announced last week that Jed Walentas and his Two Trees development company is in contract the Domino site for about $180 million (three-times what CPC had paid for it in 2004, but also less an arduous and contentious public approval process), there were widespread concerns that Mr. Walentas would not live up to the promises of his predecessors. In a recent interview, the developer admitted as much.

"Basically, that analysis is correct," Mr. Walentas told The Observer.

"That MOU was not signed by us and the zoning is what it is," he continued. "But at the same time, I'm not tone deaf. I know there is a lot of interest in affordable housing in the community. If we can reach a broad level of support for more, and it is buildable, that is something we would consider."

Mr. Walentas stressed that he still had no idea what his firm planned to do with the expansive site, which stretches for six blocks on the north side of the Williamsburg Bridge and is best known for its iconic Domino sign and smokestack-topped refinery building, both of which were landmarked in 2007. Mr. Walentas admitted it would be difficult to tamper too much with those two pieces, but the rest of the site remains up for discussion.

Yes, he is willing to take the whole damn thing back through the ULURP process, one of the reasons it is arguably much more valuable than it once was. When the rest of Williamsburg was first rezoned those eight years ago, turning it from a wasteland of warehouses into a wasteland of condos, Domino was to remain as the one major bastion to the area's historic industrial character, a bit of grit and blue collar jobs still on the waterfront. The other small holdout was an area on the northern side of the neighborhood, bordering Greenpoint, where it just so happens Mr. Walentas has just opened one of the city's finest hotels. So the city's dreams did not exactly play out.

Mr. Walentas is willing to keep at it, even if one North Brooklyn development watcher called it "crazy to go back to ULURP." Mr. Walentas sees things differently, and to his credit our source also noted that "if anyone can do it, he can." Mr. Walentas said Two Trees would undertake a study of the entire site into the fall to determine the best course of action.

"To be honest, people probably won't believe this, but we really haven't even begun to develop what we think is the best plan for the site," Mr. Walentas said. "We did our underwriting on the plan that is in place, but we're going to take 4, 6, 8 months to study this and come up with the best course of action. If we come up with something better and build a consensus around it, that's what we'll build. If we conclude the plan that's in place now is optimal, we'll build that plan."

He added that "you don't need the ULURP to make an economic go of this," so if his team were to go that route, it would be a sign of a superior plan.

Having a zoning in place does make negotiations easier, though. "We can try and rezone this, and if it doesn't work, we'll just go back to what we've got," Mr. Walentas said. "It's not like we've got the choice between something or nothing. We've got the choice between what has been proposed and what we might want to do."

He stressed that whatever happens, there will be an intensive community outreach. "We do not even know what they are looking for at this point," Mr. Walentas said. He also pointed out that the project had struggled in part because of the incredibly demanding parameters of the previous plan, which is why Two Trees will be exploring all possible options.

"Regardless of what the deal was with the previous people, it's been several years and nothing's gotten built," Mr. Walentas said. "One of the biggest challenges is to make something happen. I do think affordable housing will be at the top of the list, but there's a wide array of social benefits this project can offer, from schools to open space to community space."

As far as an architect goes, Mr. Walentas said he has not even begun to think about that part of the project and is instead focused on completing the planning. He said he was open to working with multiple designers on the site but also acknowledged that he had met with the project's original designer, Rafael Viñoly.

While the process is daunting, and any reduction in affordability, allowable as it is, will likely ignited a local firestorm, some local machers are looking forward to improving the project and, more importantly, finally having something built.

"The Domino rezoning was never a particularly good deal for the community, even with the promised affordable housing," Ward Dennis, co-chair of Neighbors Allied for Good Growth said in an email. It was substantially larger than prior waterfront zonings, and didn't address key infrastructure issues—transit, transportation and particularly open space."

Perhaps negotiations with Mr. Walentas might help address some of these issues, while others have existed all along, Mr. Dennis concluded. "It's encouraging that this developer is seriously looking at building some of that affordable housing," he said, "but it has been clear all along that nothing was guaranteed, and that anything over 20% (the inclusionary zoning baseline) would be tenuous at best."

Jed Walentas is ready to set up his Domino. (Getty)

So much for those other bidders.

Two Trees has indeed taken over the sprawling Domino Sugar site in South Williamsburg, a deal said to be worth $160 million. CPC Resources, the for-profit arm of non-profit builders CPC that had been developing the site since 2006, announced the deal closed this evening.

"CPCR’s goal for Domino Sugar has always been to bring to the project a well established, reputable real estate company that knows New York and is committed to building neighborhoods and creating communities," CPC’s President & CEO Rafael Cestero said in a release. "Two Trees is just that, and this deal is a great opportunity to realize our vision for Domino as a vibrant, mixed-income, mixed-use waterfront community and to maximize the economic benefit to CPCR and our partners."

It was not clear where CPCR's partner in the project, Brooklyn developer Isaac Katan, stood on the deal. Previously, he had brought litigation against CPC for its decision to sell the valuable real estate. Mr. Katan could not be reached.

Part of the challenge in the pair's ability to move forward on the project was the fact that it went through a lengthy rezoning process that left the project burdened with a number of community benefits, most notably a requirement that 30 percent of the projects 2,200 apartments be reserved as affordable housing, an unusually high bar for a privately built project.

How Two Trees will grapple with these challenges will be interesting to see. Some neighbors have expressed concern that the developer might try and wriggle out of these commitments, but that seems unlikely given the ire it would create in the community, one in which the company has taken an increasing interest. Just last month, Two Trees opened the Wythe Hotel on the Northside.

When the deal was first revealed earlier this month, The Observer asked Jed Walentas, Two Trees' principal, if this meant Williamsburg was the new Dumbo. "No," he replied. "For us, it's just a good fit for us. There are other things not in Williamsburg that we're looking at."

Update:  Two Trees released the following statement from Mr. Walentas:

"The site of the old Domino Sugar Factory offers an unparalleled opportunity to create a new vibrant and mixed-use community, bringing additional housing, jobs, open space and amenities to a long-dormant waterfront parcel. We look forward to working with local and community leaders to bring our expertise and track record of delivering high-quality projects to this wonderful community."

Brooklyn Branding company moves to 20 Jay Street.

The company, which counts social link sharing startup StumbleUpon and home décor website One Kings Lane as clients, will be moving out of their old digs on 45 Main Street into 20 Jay Street later this year.

Director of Strategy and Red Antler co-founder Emily Heyward told The Commercial Observer that the move was spurred on by a need for more space while capitalizing on a white hot and shrinking Dumbo market.

“Real estate in Dumbo is a scarce commodity,” said Ms. Heyward. “There is a sense that we have to grab it before it disappears.”

The company moved into a 1,761-square-foot space with six employees and freelancers in early 2010. They outgrew the space quickly, and while preferring to stay in 45 Main Street the limited vacancy in the building—currently at 3.2 percent—and the rapid growth of neighbors like Etsy and Huge led Red Antler to move to 20 Jay Street.

Media agencies, design companies and software development firms are coming to Dumbo in droves, said Caroline Pardo, director of commercial portfolio for Two Trees Management, the company that manages 45 Main Street and 20 Jay Street.

“We’re getting a lot of startups and we are getting a lot of growth,” said Ms. Pardo, who noted that vacancy at 20 Jay Street is at three percent. “Etsy is growing, Red Antler is growing, and they are absorbing the growth.”

Huge, an interactive agency, is looking to add 15,000 square feet to the 50,700 it currently occupies at 45 Main Street, said Ms. Pardo.

“I think initially their name was meant to be ironic but it's not anymore,” said Ms. Heyward. “Now it's just accurate.”—Daniel Edward Rosen

Dumbo has played host to more (and classier) weddings than a Las Vegas chapel, but the neighborhood has always lacked a flower shop. At last, Gramercy Park Flower Shop will bring blossoms to one of the city's more romantic locales. The store has taken 1,200 square feet of retail space and 1,400 square feet for an office in a newly converted warehouse that faces Adams Street.

The leases are for 12 years, and the asking rent was $30 a square foot.

"A lot of people say it seems like a big space for a flower shop," Two Trees Management's Caroline Pardo told The Commercial Observer. But she said the loft-like store means customers can watch the florists putting together arrangements. In addition, the store will also offer landscaping and outdoor furniture. "It's not," Ms. Pardo said, "just a typical, run-of-the-mill [florist]. They needed a slightly larger space."

Ms. Pardo said an additional 20,000 square feet of ground-floor space is available in the building, which landlord Two Trees hopes to rent to an office tenant in need of street frontage, such as a design firm, a public-relations company or an architect.

"It has a lot of character," she said, with an open floor plan and three entrances.

Gramercy Florists has three Manhattan locations, but this is its first Brooklyn venture. Alas, for Valentine's Day this year, it will still be chocolates and no flowers for Dumbo gals and guys because the shop won't be up and running until March.

Ms. Pardo represented the landlord in-house, and Aliza Weston of Legacy Real Estate represented the tenant.

lkusisto@observer.com

55 Washington Street

Educational publisher Flocabulary is attempting to revive a legacy dormant since the days of Schoolhouse Rock, though it's added a hip-hop inflection for a new generation. Citing influences from Debussy to De La Soul, Flocabulary was created in 2005 to teach academic content to grades 3 through 12, and is now taught in 10,000 schools nationwide.

The company is joining the bands of small publishers and artists flocking to Dumbo, where it signed a lease for 915 square feet at Two Trees Management's 55 Washington Street in Dumbo.

Caroline Pardo represented Two Trees Management in the deal.

egeminder@observer.com

Before they were flashes of pixels jettisoning across screens, books meant pages and crackling spines and penned notes in the margins. Although bookstores may be closing, Dumbo's recently opened art gallery Central Booking is devoted to those strange relics of pre-Kindle civilization.

It's perhaps fitting that physical books are finding homes in spaces typically reserved for aesthetic appraisal, or maybe an onslaught of digital reading has sparked interest in books as physical things. Whatever the reason, Central Booking is like an acid-fueled bookstore turned inside out. Its rotating book art exhibitions range from re-envisioned Natural History texts to large book sculptures. Books hang from the ceilings and racks of zines line the walls.

Originally a pop-up gallery, Central Booking signed a two-year lease at Two Trees Management's 111 Front Street. The 1,250-square-foot gallery opened last week as part of Dumbo's First Thursday celebration.

egeminder@observer.com

It was construction firm Skanska Koch—with work on the World Trade Center, Yankee Stadium and the George Washington Bridge to its name—that made out with the Department of Transportation’s renovation plans. In need of a temporary home during construction, the international construction and consulting company settled on Dumbo, where it leased a 4,070 square-foot site at 55 Washington Street.

“Skanska needed a field office in Dumbo,” said Vicus Partners’ Bert Rosenblatt, who represented the construction firm. “They needed the space to be in move-in condition.”

The bridge itself is visible from the building’s windows.

The building, one of Two Trees Management’s, was represented by Caroline Pardo in-house.

egeminder@observer.com

Founded in 1996 by poets Toi Derricotte and Cornelius Eady, the organization was originally conceived as a means of countering the underrepresentation of African-American poets in writers’ workshops and literary programs. What began as a gathering of 26 poets now maintains a prestigious national fellowship program, a roster of critically acclaimed faculty and an annual writer’s retreat.

Cave Canem, Latin for “beware of the dog,” is taken from the House of the Tragic Poet in Pompeii, one of the few structures spared in the eruption of Vesuvius in 79 A.D. Mr. Eady came across the inscription and thought it a fitting name for a poet’s safe haven.

E. L. Martin Partners represented Cave Canem in the transaction. Natalie Ungari of Two Trees Management repped the landlord.

egeminder@observer.com

As ruler of the village, which years earlier had been christened Dumbo, Mr. Walentas surrounded himself with trusted confidantes, and in due time his advisers absorbed his aesthetic values, acting as arbiters of taste for the flourishing Kings County kingdom.

Thirty years later, with buildings in Dumbo now commanding upward of $24 per square foot, the task of curating the well-manicured waterfront neighborhood has fallen to Caroline Pardo, director of commercial leasing for Two Trees, Mr. Walentas’ management company. Unlike many of her counterparts across the city, Ms. Pardo’s position relies as much on her refined taste as it does on her ability to sign tenants—or, nearly as often, turn them away.

“For the retail at least, we’re very exclusive and very picky with the type of people we bring into our spaces because from the very beginning David had this vision of building a community,” said Ms. Pardo, 30, who joined Two Trees in 2003. “He knew that in order for people to be happy and create this neighborhood, it depended on the type of retailers that he brought to the neighborhood.”

To be sure, the Brooklyn resident has had a say in turning away restaurants, diners and delis that threatened to derail ancient ventilation systems inside the historic buildings and, in one case, a trophy retailer, which she and Mr. Walentas simply deemed, well, irrelevant.

More surprising, however, are the chain pharmacies like Duane Reade and the bank branches that Two Trees has turned down, often at the cost of well-above-market-rate rent.

In lieu of those chains, Ms. Pardo said she was in search of a sporting goods retailer to occupy space in the neighborhood in anticipation of the long-awaited Brooklyn Bridge Park, a sweeping 85-acre public recreational area slated for completion by 2012.

“We want to maintain the character of the neighborhood by having mom-and-pop stores … as opposed to having a bank on every other corner or having too many national chains in the neighborhood,” said Ms. Pardo, who noted that the few chains currently leasing with Two Trees include the country’s first West Elm furniture store and a BoConcept branch owned by a husband and wife. A Starbucks in Dumbo is housed in one of the few buildings not owned by Two Trees, Ms. Pardo added, a point Mr. Walentas has also made in previous interviews.

Ms. Pardo’s high standard has paid off, with tenants from the creative and technology sectors rushing to embrace Dumbo’s 11201 ZIP code. This year alone, Guerin Glass Architects and clothing designers Scott Langston and Morgan Carper, among others, have added a chic sheen to the former home of the world’s first tin can manufacturer.

ACCOMODATING THE CITY'S WAVE of artists, including galleries, venues and studios, has been at the center of Mr. Walentas’ philosophy since he began buying buildings in Dumbo, and it’s an ideal that Ms. Pardo has continued to shepherd by offering incentives and rent reductions to the typically empty-pocketed virtuosos. The beloved St. Ann’s Warehouse pays nothing for its space inside a former spice-milling factory; and Galapagos, a venue formerly operating in Williamsburg, pays just $6.82 a square foot for its 10,000-square-foot Main Street space.

“Although the market in Dumbo has increased, and probably a lot of the artists would be priced out of the neighborhood, we sort of have a general practice,” said Ms. Pardo. “Every now and then we bring it up again and talk about it and see if we should continue, and so far we have been able to continue to do that.”

Despite the offbeat leasing strategies, Ms. Pardo has signed 141 new leases for Two Trees since joining the company. While a majority of the leases are in Dumbo, where as many as 373 commercial tenants currently dwell in an estimated 3 million square feet of building space, others are for nearby buildings in downtown Brooklyn, where the company has sought to expand in recent years.

Earlier in 2009, Ms. Pardo successfully leased the remaining commercial space at 194 Atlantic Avenue, 125 Court Street and 138 Court Street, and is now setting her sights on keeping existing tenants. As many as 130 leases expired this year, and more are coming up, but Ms. Pardo insisted that she has managed to re-sign 77 percent of those tenants.

The furniture store Wonk and Hecho en Dumbo, a taco stand that subleased space in the Dumbo General Store, are among the 23 percent of tenants who are leaving, said Ms. Pardo.

BORN IN HAITI, MS. Pardo arrived in New York in 1996 by way of Miami to attend classes at Hofstra University, where she met her future husband, Ralph Pardo. A communications major, Ms. Pardo described her real estate career as a happy accident, one she fell into while temping at Helmsley-Spear, which led to a job as assistant to the general manager of the Fisk Building on West 57th Street. When Cushman & Wakefield took over management of the building in 2002, she strategically positioned herself for a lease administrator gig at the firm.

“When Cushman & Wakefield took over, I reached out to them and I told them sort of, ‘This is what I want to do; I want to grow with the company,’” Ms. Pardo said. “I sort of laid down the groundwork, I guess, and they were happy with it, and I went from there.”

When Ms. Pardo interviewed for the Two Trees job in 2003, Mr. Walentas escorted her on an informal jaunt through Dumbo, asking her more about herself than her credentials. Crossing Main Street, Front Street and Washington Street, the pair surveyed the retail offerings, and Mr. Walentas asked her a simple question: What types of storefronts would she seek to bring to Dumbo if she were hired?

Her answer, a hair salon, clicked with Mr. Walentas. Ms. Pardo was hired soon after, and in a fairy tale ending, the young director of leasing was able to snag the Salon de Quartier last year.

“We talked about a hair salon during the interview,” recalled Ms. Pardo of the tour. “I’d been pushing for one forever—and we finally got it last year, which is great. I guess they liked that.”

jsederstrom@observer.com

“We’d love to stay in Dumbo,” said Susan Feldman, the Warehouse’s president and artistic director. “We would love to be able to stay in Brooklyn, but we’re also going to look in Manhattan.”

St. Ann’s is being displaced by the Walentases’ controversial 17-story Dock Street residential development, which the city finally approved in June over howls of protest from some neighbors, who, despite the developer’s inclusion of a middle school, deplore the building’s height and proximity to the Brooklyn Bridge. (This month, those neighbors filed a lawsuit against the city for approving the development.)

One person the Dock Street project is not controversial with is Ms. Feldman, despite its role in her displacement. After all, when St. Ann’s first relocated to Dumbo from Brooklyn Heights in ’01, it was only planning on staying nine months. Thanks to what Ms. Feldman called the Walentases’ “enlightened development” practices, her organization has been allowed to stay on rent-free.

“The Walentases are working with us to find a space,” Ms. Feldman told The Commercial Observer. “We always knew that at some point it was going to be developed. So they’re helping us move, and they’ll support us in our move, and it’s friendly.”

Ms. Feldman has hired nonprofit specialist Paul Wolf, of Denham Wolf Real Estate Services, to scout out about 15,000 square feet of space, which, in an otherwise exceedingly tenant-friendly market, is more difficult than it might seem, given the Warehouse’s unusual space needs. Requirement No. 1: 25-foot ceilings. Requirement No. 2: columns spaced as close to 50 feet apart as possible.

Worst comes to worst, the Warehouse could buy a development site and put up a second incarnation of its current digs.

“The building we’re in right now is fairly inexpensive to build,” Ms. Feldman pointed out. “It’s just a cinder block building.”

drubinstein@observer.com